Creating a Lasting Legacy
Now celebrating 25 years of providing meals to individuals battling illness or recovering from major surgery, Food From The Heart is launching our FOREVER! campaign to ensure the long-term health of our organization.
Our clients depend on our service, and the FOREVER! campaign is designed to ensure we can continue our work in perpetuity by confirming planned gifts from our donors and volunteers.
There are many options when making a planned gift to an organization while still taking care of your loved ones and we wanted to give you an overview of the various options available to you.
Whether or not you let us know that you have included Food From The Heart in your estate plan is up to you. (Many people do not like to divulge that they have remembered an organization in their estate plan, and that is completely understandable).
We simply want to give you the information and remind you that this is an easy way to remember an organization that you care about and help ensure the long-term future of Food From The Heart.
Thank you in advance for considering a planned gift to help secure our future.
We have a financial planner willing to offer an initial consultation at no cost if you would like to pursue the concept a bit further, or you can consult with your own accountant or estate attorney.
WHAT IS PLANNED GIVING?
Planned giving encompasses a variety of ways that gifts can be made to Food From The Heart (FFTH) from accumulated resources. It usually involves financial or estate planning; however, it is not reserved for the wealthy. Planned giving is a means by which anyone concerned with the wise use of his or her personal resources makes a considered choice about their ultimate disposition.
In general, planned gifts are made through a Bequest in a Will, a Life Income Gift or Gifts of Special Assets.
Planned giving establishes a way for you to provide for your loved ones while also remembering FFTH. It may enable you to provide more for your heirs and to make a larger gift than thought possible. It often reduces taxes as well.
A BEQUEST IN A WILL
Perhaps the easiest and most common way of making a planned gift is through your will. Yet over 50% of Americans do not even have one!
If you die without a will, the state will divide your assets among your spouse and children (regardless of their age); appoint an administrator that may cost the estate large fees; and appoint guardians, who may or may not have been your choice, for your dependents. The state makes no charitable contributions, and it will ensure that your estate pays as much tax as possible.
By making a will, you appoint your own administrator. You name the guardian of your dependents, you control applicable taxes, you can create a family or charitable trust and you can share your resources with your family, Food From The Heart or other organizations of your choice. A bequest in a will can take the form of a set amount of money, a percentage of an estate, a specific asset (such as a home or piece of valuable jewelry), a trust, or the naming of Food From The Heart or any other organization as a contingent beneficiary.
Sample language for including Food From The Heart in your will might be: “I give, devise, and bequeath (state amount, asset, or percentage of the estate) to (name and address of Food From The Heart) to be used (describe use)” or you can state “to be used as the organization’s board deems appropriate.”
LIFE INCOME GIFTS
Life income gifts provide you or your designated beneficiary income for life in exchange for your gift. The three most common types of life income gifts are a pooled income fund, a charitable gift annuity and a charitable remainder trust.
Pooled Income Fund
In the Pooled Income Fund, gifts ($2,500 gift minimum) are “pooled” with other gifts and invested in a professionally managed portfolio. The donor receives the following benefits:
• A guaranteed income for life. The amount of the income depends on the rate of return on the fund’s investments. The income can also go to your designated beneficiary after your death
• An immediate federal income tax deduction. The amount of the deduction is usually based on the age of the donor and/or beneficiaries
• Elimination of capital gains taxes, if funded through appreciated securities (stocks, bonds, or mutual funds)
• A possible reduction in estate taxes
• At the death of the final beneficiary, the property goes to FFTH or any other beneficiary that you named.
Charitable Gift Annuity
The benefits of establishing a Charitable Gift Annuity are similar to that of the pooled income fund with the following differences:
• The minimum gift is $5,000
• The income for life is guaranteed at a fixed amount
• A portion of the gift is deductible
• A portion of the income received is tax exempt
Charitable Remainder Trust
A Charitable Remainder Trust is available to donors using assets of $100,000 or more. They can be funded with various types of assets, including real estate. Like the pooled income fund and the charitable gift annuity, the charitable remainder trust provides income for life, an income tax deduction, relief from capital gains taxes (if funded through appreciated property), and a possible reduction in estate taxes. The income fluctuates based on the performance of the portfolio. If you are seeking fixed income annually, a charitable remainder annuity trust is an option to consider.
Charitable Lead Trust
The Charitable Lead Trust, another estate planning tool, enables you to transfer assets to a trust that pays its income to the FFTH for a set period of time. At the end of the term, the principal and all capital appreciation returns to you or others that you name.
GIFTS OF REAL ESTATE, APPRECIATED PROPERTY & TANGIBLE PERSONAL PROPERTY
Real estate or securities can be the source of your gift to Food From The Heart. Using a Charitable Life Estate Contract, for example, you can deed your home, vacation home, farm, ranch, or condominium to FFTH and retain the right to live on the property and/or receive income from the property for as long as you live. You receive an income tax deduction when the property is deeded to FFTH and normally avoid any capital gains taxes when making the transfer. Your inheritance and estate taxes may be reduced at the time of your death.
Gifts of appreciated real estate or securities allow you to avoid capital gains taxes. It is important to transfer the stock or real estate to FFTH prior to selling it. However, if the securities or real estate have decreased in value, you should sell the assets before making the gift, thus establishing a capital loss and a potential tax deduction.
Gifts of tangible personal property, such as jewelry, coins, works of art, automobiles, etc. may also be given to FFTH. You are responsible for setting an appraised value on the gift. Any gift over $5,000 must be independently appraised.
Life Insurance is another way to make a sizeable gift to FFTH. For example: You can purchase a new policy and make FFTH the owner and beneficiary of the policy. This enables you to “leverage” your gift, ultimately making a much larger gift than otherwise possible. Then, you can make contributions to FFTH to pay the ongoing premiums, which will become tax deductible to you.
You can make FFTH the owner and beneficiary of an existing policy. The current value of the policy is tax deductible, as are future premium payments. You can make FFTH a contingent beneficiary of an existing policy or name FFTH to receive the proceeds of the policy if the designated beneficiaries predecease the insured.
Also, the remainder value of many retirement accounts can be heavily taxed when left to friends and family, but pass tax-free to FFTH upon your death. Review with your attorney or financial advisor to learn if this is an appropriate gift for you.